Short term rentals: cities ask Europe’s help

14 July 2022

Yesterday, the European Cities Alliance on Short-Term Rentals and beyond published an open letter on the need for legislative action on tackling illegal short-term rentals. Mayors, deputy mayors and other city officials of Barcelona, Bologna, Brussels, Arezzo, Paris, Vienna, Amsterdam, Brussels, Lyon, Porto, and Florence, as well as dozens of MEPs and Eurocities, signed the letter demanding action. They feel the European Commission is abandoning the project of a legislative initiative to regulate short-term rentals (STR).

The issue at hand

In Amsterdam, short-term holiday rental (STHR) listings grew from 4,500 in 2013 to 22,000 in 2017. In Lisbon’s historic district Alfama, more than 55% of the apartments are now STHR. In the centre of Florence, they have increased by 60% since 2015, and in Kraków by 100% between 2014 and 2017. Experts call it the ‘touristification’ of the city. It deprives traditional neighbourhoods of their character and drives residents out of the urban centres.

Clearly, the issue is not new. For years, several cities across Europe have led the discussion arguing that short-term rentals pose problems. On the one hand, they are a way to secure money for those with a spare room or apartment. But they raise rent value, reduce the supply of long-term housing and cause many inconveniences for neighbours. In reaction, some local authorities have created specific fees for STHR or are considering banning companies like Airbnb.

It’s the case of Barcelona, where, after years of residents’ complaints of constant noise, high lease prices, and apartment shortages, the municipality announced a ban on Airbnb and rentals under 31 days last year. However, the decision was overturned by the Spanish Supreme Court in January 2022. So, the problem remains.

A need for European action

Cities seem to be alone in thinking about solutions. After announcing a legislative initiative to regulate short-term rentals (STR) last autumn, and opening it up for public consultation, the European Commission postponed it several times. They might even drop it, as it doesn’t appear on the planned list of initiatives until December 2022.

So signatories of the letter “call on the Commission to urgently go forward with proposing its announced short-term rental initiative. The availability, affordability of housing, as well as liveability of our cities are at stake.” With the easing of the pandemic, cities experience a new boom in tourism and fear the pressure of STHRs on housing needs.

Local authorities demand a “proposal giving clear authorisation and discretion to authorities to regulate holiday rentals in the general public interest and putting in place registration systems.” Although local, regional or national authorities will decide the exact requirements “so they can tailor their approaches to the specific needs.”

The cost of tackling illegal STHR

Cities need help with enforcing regulations and pursuing illegal STHR. Currently, this is made difficult by platforms refusing to share critical information with the authorities. “Therefore, access to data should be ensured in order to enforce the rules,” reads the letter. Otherwise, administrative costs will substantially increase for municipalities because of litigation fees and investment in “professional capacity to check rental data in alternative ways, to follow-up complaints and indications of illegal STR-activity, to impose fines, etc.”

Finally, signatories request “a better and more efficient system that enables all platforms to understand and comply with local rules across the EU, regardless of the size of the platform.”

*The European Cities Alliance on STHR is: Amsterdam, Arezzo, Barcelona, Berlin, Bologna, Brussels, Florence, Krakow, Lyon, Munich, Paris, Prague, Porto, Utrecht, Valencia, Vienna, Warsaw and Eurocities.